Each segment of the market represents a somewhat

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Each segment of the market represents a somewhat different opportunity. The firm has to study the opportunities in different parts of the market before taking a position. There is no unique way to segment a market. The fortunate firm is often the one that has found a creative new way to segment the market. 2. Market positioning : The second principle of marketing strategy is to select a specific pattern of market concentration that will afford the maximum opportunity to the company to achieve its leadership objective. The company cannot be everywhere. It must go after viable positions. It must follow the principle of target marketing. Market segmentation throws up not one but several market segments with varying degrees of potential, profitability and risks. The firm way not be interested in all these segments. There may be segments assuring immediate profits; there may be segments demanding heavy investments by way of market development; some other segment may show very great potential but may display tough barriers to entry. As such, the question which segment / segments the firm should select as its target market, assumes crucial importance. The firm may analyse the risks, analyse the profitability and size and the competition in the different segments. Still, it may not be possible for it to readily pick up the target segments. Quantitative techniques may take the firm thus far, but not to be concluding point. Judgement alone can take the firm to the concluding point or final decision on the target market. This decision is essentially a decision in the realm of strategy. It is not just a number game. What makes any part of the market an attractive one for a particular company to go after? A maximally attractive market segment would have four characteristics : 1. The market segment is of sufficient size. 2. The market segment has the potential for further growth. 3. The market segment is not “owned” or overoccupied by e xisting competition. 4. The market segment has some relative unsatisfied needs that the particular company can serve well. 3. Market entry strategy : The third element of marketing strategy is to determine how to enter a target market segment. The company can proceed through acquisition, internal development, or collaboration with other companies. Acquisition of an existing product or company is the easiest and quickest way to enter a new market. Acquisition obviates the costly and time-consuming process of attempting to build up internally the knowledge, resources, and reputation necessary to become an effective participant in that part of the market. Annamalai University
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34 Some companies prefer to achieve most of their growth through internal development. They may feel that true leadership is only achieved by running their own research and development laboratories. They may feel that the companies around to acquire are not very good or are asking for too much. Or there may be no companies around to acquire.
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